Study: Less Than 1% of Online Purchases Result from Social Media

Social media has transformed the way people communicate, but not so much the way that they shop.

A new report from Forrester Research titled The Purchase Path of Online Buyers in 2012 reveals that less than 1 percent of online purchases can be traced back to social media.

A 2011 Nielsen study found that roughly one quarter of all time spent by Americans online is devoted to sites such as Facebook, Twitter, LinkedIn and Tumblr, and 70 percent of active online networkers shop online, according to Time.

So, the minimal amount of purchases directly linked to these sites might come as a shock, but it is an issue that businesses have been contemplating for some time.

Last year, Inc. magazine ran an article revealing that many business executives had not found social media sites such as Facebook, Twitter, YouTube, MySpace and LinkedIn useful in making money.

Earlier this year, ahead of the Facebook initial public offering, General Motors announced plans to pull its ad campaign with the social media giant, Bloomberg reported. The automaker was reportedly spending about $10 million on paid advertisements, but not seeing a worthy return.

People might like the idea of being able to share or discover products on social-media platforms. Doing so might amplify brand awareness or influence purchases made later. However, this new research reveals something that many businesses have already learned: Social media is not converting individuals into impulse shoppers.

“We've known for a while that Facebook hasn't been a direct sales channel and for most companies it never will be,” Sucharita Mulpuru, author of the Forrester report, told Internet Retailer.